Tesla to open factory in Shanghai capable of 500,000 cars per year

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on Tuesday signed agreements with Shanghai authorities that will allow it to a plant in the Chinese city with an annual capacity of 500,000 , local media reported.

The U.S. carmaker signed agreements with the Shanghai municipal government, Shanghai Lingang Area Development Administration and Lingang Group, according to news website Knews, which is affiliated with state-owned Shanghai Media Group.

Tesla has been in protracted negotiations to open its own in China to help bolster its position in the country’s fast-growing market for electric cars and to avoid high import tariffs.

Bloomberg reported that CEO Elon Musk will be in Shanghai on Tuesday for the announcement.

Tesla’s current lone assembly plant is in California, and though it has been interested in the Chinese market for years, a recent decision by the Chinese government ending the requirement that Western companies pair with a Chinese partner opened the door for Tesla to proceed.

Reporting by Brenda Goh



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